1. evolution of relationship marketing

8/3/2019 1. Evolution of Relationship Marketing

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Evolution of Relationship Marketing1960's Direct mail1970's Direct marketing

Direct mail + tele- marketing + other one to one marketing techniques forbetter interaction and to create sales leads.

Ear ly 1980's Database marketingUse of computer technology for information gathering and systematic

processing of such data for making the activity directed to satisfy customers.

Late 1980' s One to one marke tingUse of affordable technology to communicate with customers' individually.

Earl y 1990' s Loyal ty Marke tingFocus on building faith or trust for retaining existing customers andextending their life as a customer.

Late 1990' s Re la ti onship Marketing

Is this really a new concept or is it old wine in new bottle?


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Just what do we mean by relationships??Partners exchanging valued resources in agreement

I win when you winRM is the ongoing process of engaging in cooperative andcollaborative activit ies and programs with immediate and end-user customers to create or enhance mutual economic value,at reduced cost (Parvatiyaar & Sheth 1998)Process of identifying and creating new value with individualcustomers and then sharing the benefits of this over thelifetime of association (Gordon 1998)


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RM

emerged out of services marketing management and industrial

marketing management fields

describes a specific marketing approach that is a subset or a

specific focus of marketing


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Narrow perspective: RM is used as a sales promotion tool (eg.

Loyalty schemes) or as an elaborate form of database marketing

Broad perspective: RM focuses marketing strategy away fromproducts and their lifecycles to customers lifecycles

So is RM a replacement for Product Marketing? Or is it afurther option?

Is finding products for customers moreimportant or

finding customers for products more important?


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A mass marketer is a hunter a relationship marketer isa farmer

Characteristics of high quality long term relationships(measurable ones in bold)

Trust Mutuality of control Commitment Satisfaction with relationship Shared values and beliefs

Dependence

Attachment

Communicative interaction/ openness

Investment


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Presentation: Reading 1


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elationship Marketing is the central philosophy that underlies CRMBenefits of relationship to a firm ??

Can build up knowledge repositories about their customers, - help understand their customers needs, wants , changing values

and interests.- assist in a wide range of marketing activities, including the

development of new products and services, more appropriatepromotion, and more effective distribution strategies. Possibility of higher transaction value over a period of time. Customers develop realistic expectations from the companyCustomers develop better understanding of what information theyneed to provide to the company to derive maximum satisfaction Possibility of higher customer capital Possibil ity of lower customer defect Possibility of more spread positive word of mouth


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Benefits of relationship to a customer ??

1. Confidence benefits which is knowing what to expect from the service encounter, therebyreducing anxiety2. Social benefits

such as being personally recognized by employees of the firm andperhaps developing friendships between customers and employees3. Special treatment benefits which include customers receiving price discounts and faster or

customized additional service.4. Efficiency benefitsreduces his or her choices, thus save time and cognitive effort.


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Levels of relationship

Brand: Rare or no contact (eg. Food products, clothes)

Distant : infrequent interaction, mediated by technology(utility services, ISP)

Face-to Face: Meeting and conversation(e.g. retailer, hotelier, car mechanic)

Intimate: friendly, highly involved, physical contact,disclosure of personal information

(dentist, hairdresser)

low

high


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Who wants a relationship anyway???Use a questionnaire to

A. Measure customers expectations about their relationship with the firm

B. Measure performance of the firm.-Ask respondents to rate the firm on satisfaction, closeness of relationship,likelihood to stay, and likelihood to recommend the service provider tosomeone else.- Collect demographic questions on age, gender, household size, education,occupation, and income are asked.

C.Calculate average scores .D.Use chi-squared tests and one-way ANOVAs to compare the demographic

profile of the respondents to test for significant differences between groups.Will be mostly heterogeneousE.Use a latent class regression model / cluster analysis to look for possiblesegments of consumers and the relative importance of relationshippreferences to these various segments.


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Wants relationship,

provided the firmdemonstrates that it isbetter than thecompetitors

Wants proximityto the provider,customization,and expertise,but all for thelowest price.

Expects good service

1. evolution of relationship marketing

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